Pipeline Velocity

What is Pipeline Velocity?

Pipeline velocity measures how quickly opportunities move through your sales pipeline from initial stage to close. It's calculated as: (Number of Opportunities × Average Deal Size × Win Rate) / Sales Cycle Length.

Pipeline velocity is essentially a "speedometer for your sales engine" - it tells you how fast you're converting pipeline into revenue. Higher velocity means faster revenue generation; lower velocity indicates bottlenecks and inefficiency.

Why It Matters

Time kills deals. The longer opportunities sit in pipeline, the less likely they are to close. Pipeline velocity directly impacts revenue growth: doubling velocity effectively doubles your revenue output without adding headcount or increasing pipeline generation.

Pipeline velocity also diagnoses sales process inefficiencies. Slow velocity reveals bottlenecks: stages where deals get stuck, processes that create delays, or missing information that prolongs evaluation.

Benchmarks

• Healthy velocity: Deals move from lead to close in 30-90 days for typical B2B SaaS
• Stage bottlenecks: Each stage should take 7-14 days; stages longer than 30 days indicate problems
• Velocity impact: Companies with fast pipeline velocity grow 2-3x faster than slow competitors
• Forecast accuracy: High-velocity pipelines forecast more accurately because deals close faster

Best Practices

1. Track velocity by stage - Measure how long opportunities spend in each pipeline stage. Identify bottlenecks where deals consistently get stuck.

2. Set stage time targets - Establish maximum time limits for each stage. Opportunities exceeding limits should get special attention or be removed from pipeline.

3. Identify velocity patterns - Analyze high-velocity deals to understand what accelerates them. Replicate those conditions across more opportunities.

4. Remove deal-killing delays - Common delays include: slow proposal generation, delayed demos, procrastinated decision meetings. Streamline these processes.

5. Create urgency throughout - Don't wait until the end to create urgency. Build it from the first interaction: specific timeline, compelling event, or seasonal budget cycle.

Common Mistakes

• Tracking aggregate pipeline velocity without examining stage-by-stage breakdown
• Allowing deals to linger in stages without clear next steps
• Not following up quickly enough after meetings or demos
• Accepting slow evaluation cycles as normal rather than challenging them
• Focusing only on adding pipeline rather than accelerating what exists

Key Takeaways

• Pipeline velocity measures how fast deals convert from lead to close
• Time is the enemy of deal closing; faster velocity dramatically increases revenue
• Track velocity by stage to identify and address bottlenecks
• Stage time targets prevent deals from lingering indefinitely
• High-velocity deals reveal patterns that should be replicated across the pipeline